Prince Hill Wines tips towards liquidation

Creditors of the embattled
Prince Hill
Wines Limited have approved a deed of company arrangement with venture capitalist Blueknight Corporation in a last-ditch effort to avoid liquidation.

Under the arrangement, Blueknight would re-capitalise Prince Hill Wines, which is under administration by McGrathNicol, and eventually relist the company.

“If we went down the path of liquidation the company would be completely wound up and creditors would get nothing," McGrathNicol Sam Davies said.

“We’ve jumped the first hurdle in that creditors have approved the decision. The next hurdle is shareholder approval."

Shareholders would lose their entire investment under liquidation.

Associated entities of Prince Hill Wines, Coonawarra Premium Vineyards and CPV Wines Limited, were not subject to any restructuring proposals and creditors have voted for the companies to be placed into liquidation. They remain under the control of receivers Ferrier Hodgson.

Mr Davies said creditors approved the deal with Blueknight, expecting to receive 100¢ in the dollar from their investment in Prince Hill Wines.

He said shareholders will not be so lucky. “If it relists there maybe a way for them [shareholders] to recover some of their money."

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The material assets of Prince Hill Wines are held in its associated entities, under the control of Ferrier Hodgson. Blueknight will acquire the intellectual property and the shareholding of the property, with the option of relisting in the future.

“[Blueknight’s] interest will probably be in capital appreciation once the stock relists," said Mr Davies.